Tax Court Rules And Procedure

There have been many cases in which Tax Court judges question the tax treatment of legal fees spent by spouses seeking to reduce the amount of spousal or child support they must pay.  The recipient spouse can deduct her legal fees to enforce support (on the basis that the expense is incurred to “gain or produce income from property” and the pre-existing right to support… Read More »Grenon v. Canada, 2016 FCA 4  (Rennie, Boivin, Gauthier) — FCA will only change a precedent where it is manifestly incorrect or where subsequent decisions require that it be reconsidered

This decision discusses the conditions for amending pleadings and for withdrawing earlier admissions.   [17]        Section 48 of the Rules requires that the notice of appeal be in Form 21(1)(a) which, in turn, requires that the notice of appeal relate the material facts relied on; specify the issues to be decided; refer to the statutory provisions relied on; set forth the reasons the appellant intends to rely on;… Read More »Kondur v. The Queen 2015 TCC 318 (V Miller) — Conditions for amending pleadings and for withdrawing earlier admissions

In this 100-page decision, the Chief Justice examines the principles of discovery:  [14] …    “[15]  The Federal Court of Appeal in The Queen v Lehigh Cement Limited,2011 FCA 120, 2011 DTC 5069, at paragraphs 34 and 35, described the general limits respecting discoveries:    “‘[34]  The jurisprudence establishes that a question is relevant when there is a reasonable likelihood that it might elicit information which… Read More »Canadian Imperial Bank of Commerce v. The Queen 2015 TCC 280 (Rossiter CJ) — “Full and open discovery promotes settlement and proper and efficient trials.”

[83] Thus, to make a reassessment after the normal reassessment period, as is the case here for 2002, the Minister must establish that the appellant made a misrepresentation of fact, by neglect, carelessness or voluntary omission, because there was no waiver by the appellant. [84]       The respondent only vaguely raised this point in her argument by saying that, because she was not… Read More »Kawkab Yunus c. La Reine 2015 CCI 272 (Lamarre ACJ) — To open a statute barred year, CRA must prove you made a negligent misrepresentation, even if you have not raised the issue in your notice of appeal; benefit of doubt to taxpayer for gross neglige

The appellant been CEO of Konica Minolta (Canada) Ltd. from 1994 until 2006 when he was dismissed. He sued Konica and they settled, with the settlement subject to a confidentiality agreement that excepted disclosure required by law.  Konica, not a party to the proceedings, nonetheless apply to the Court for an order prohibiting any testimony about the settlement agreement.  In an extraordinary decision, the Court ordered… Read More »Abenaim c. La Reine 2015 CCI 242 (D’Auray) — Court file sealed to protect employment law settlement

This decision offers a convenient summary of the criteria a party must meet to bring a successful motion to have an issue heard in advance of the hearing, in the hope of shortening the appeal process. [15]        Based on McIntyre [See my post here] and Sentinel Hill, there are essentially only two requirements: (1) the questions are raised by the pleadings; and (2) the questions may dispose of all or part of… Read More »Suncor Energy Inc. v. The Queen 2015 TCC 210 (Rossiter CJ) — Criteria for r. 58 motions to determine a question of law or fact

Justice Owen gives a comprehensive discussion of how to award solicitor-client costs to a successful party who had made a settlement offer.   See Sun Life Assurance Company of Canada v. The Queen 2015 TCC 171 (Owen)

Though this case deals with the general anti- avoidance rule, which raises peculiar issues, Justice Hogan gives a fairly broad review of principles that apply to decide which questions you can ask and which documents you can get. For example:  “[33]        As correctly pointed out by the Appellant’s counsel, discovery serves a much broader purpose than eliciting evidence that is admissible at trial. For example,… Read More »Superior Plus Corp. v. The Queen, 2015 TCC 132 (Hogan) — A review of the principles of discovery: which questions can you ask and which documents can you get? 

In these reasons, Justice Graham describes elements of good pleading. One surprising comment was this:  [4] …  The Minister may not rely upon assumptions of fact when reassessing a statute barred period.  The minister has the burden to prove that the taxpayer made a negligent misrepresentation justifying a late reassessment. For that purpose, the minister cannot rely on assumptions but must prove the facts supporting… Read More »LBL Holdings Limited v. The Queen, 2015 TCC 115 (Graham) — A discussion of proper pleading for Notice of Appeal and Reply

Tax Court judges have great discretion in awarding costs but the award must relate to costs of the actual Tax Court proceeding. In rare cases, costs for the audit and objection stages could be allowed, says the Court of Appeal, if those stages unduly prolonged the Tax Court proceeding.  That was not the case here.  “[13]           Awards of costs lie at the heart… Read More »Canada v. Martin, 2015 FCA 95 (Dawson, Webb, Near) — You can get costs related to audit and objection but only if you can show they added to the cost of the Tax Court appeal 

This decision, on the taxpayers’ motions to force Crown answers, reviews the law on discovery principles.  The Principles of Discovery [11]        Caselaw is clear and abundant. The core of discovery principles is that its scope should be wide, with relevancy construed liberally, without, however, allowing it to enter the realm of a fishing expedition. These basic principles are essential because the purpose of discovery is to… Read More »Burlington Resources Finance Company v. The Queen 2015 TCC 71 (Campbell) — The scope of discovery is broad, to narrow or eliminate issues

If you fail to go to a status hearing (held because you don’t pursue your case within normal time limits), the Court may dismiss the case — but you could apply to set aside the default judgment within 30 days.  If you miss the 30 days, you must meet 4 criteria to get an extension of time to apply.   See Ghaffar v. The Queen 2015 TCC… Read More »Ghaffar v. The Queen 2015 TCC 46 (Graham) – Extension of time to set aside default judgement – criteria

This was a motion to strike a Crown pleading in an “RRSP value stripping” case.  In it, the FCA considers when the Crown can add an alternative argument to support its reassessment after the limitation period has passed.  The FCA also considers when the CRA can reassess beyond the normal limitation period, despite the restrictions set out in a taxpayer’s waiver.  [32] At issue [was] whether assessing… Read More »Gramiak v The Queen, 2015 FCA 40 — Limits for alternative CRA reassessment arguments under ITA s. 152(9); a waiver can’t protect you from transactions you hide

This motion dealt with the scope of documentary discovery in a case involving the Banyan Tree tax donation scheme. The taxpayer seems to be well funded. On this motion for enhanced disclosure, Justice Jorre lists the factors to consider in ordering disclosure without redactions.  Among the interesting passages are these: “[22]  . . . 1.   The examining party is entitled to “any information, and production… Read More »Dominion Nickel Investments Ltd v. The Queen, 2015 TCC 14 (Jorre) — Parties have wide scope for documentary discovery in tax cases 

[12] … To allege in a pleading that a person is charged with a criminal offence, but the charge has not been proven, serves no legitimate purpose. [15] … unfounded allegations of a criminal matter based on affidavit evidence that have caused the appellant to incur unnecessary costs in making the motion to strike  [entitle the appellant to solicit and client costs].  Counsel, in preparing… Read More »Simard v. The Queen, 2015 TCC 2 (Rip) — If you allege unproven criminal charges, you risk paying solicitor-client costs

In this case, there was roughly $100,000 in dispute.  Taxpayer’s counsel’s fees at $66,000 were roughly the same as the amount won. For that, he got $20,000 plus disbursements. This is a dangerous precedent.  Will the Court be one-sided, awarding hefty amounts to taxpayers but confining the Crown to tariff? (In this case, the taxpayer got relatively large costs despite divided success.)  A.      Result… Read More »Klemen v. The Queen 2014 TCC 369 (Hogan) — Costs awards may threaten taxpayers